Virtual | 29 November 2021
Alternative investments can bring new ideas and innovation to portfolios. When added to a traditional asset allocation mix, alternatives could provide diversification1, lower volatility and could potentially offer higher levels of, or predictable income. Allocating to these strategies requires experience and knowledge, along with a strong capacity for research and ongoing due diligence. We believe understanding and having an established relationship with highly rated alternatives managers is one of the keys to gaining access2. Alternative can be allocated across public or private markets. We believe private markets hold significant opportunities for institutional investors. Private market managers operate strategies across private equity, debt, infrastructure and real estate, which function differently to traditional asset classes. These strategies add a distinct and different return profile to institutional portfolios, which could make them attractive to investors with long-term horizons. Learn more about alternatives, and how we can help below.
With low correlation to traditional asset classes, alternatives can help diversify your portfolio.
Potentially better returns
Alternatives have the potential to offer higher returns than traditional investments. These should be addressed
Cash flow management
Alternatives may offer higher and more regular yields than traditional investments—especially during periods of low interest rates.
Private markets are becoming increasingly popular as investors shift parts of their portfolios away from publicly traded assets in order to diversify their risk and return drivers. The opportunities in private markets span many sectors and regions, each offering something different to investors. Yet they all share the qualities of being shielded from much public market volatility and having the potential to earn a premium by being held over the long term.
However, accessing managers that invest in private markets can be challenging for some investors – this is where Mercer can help. We have been investing in these markets for more than 25 years, establishing deep relationships with a wide universe of highly-rated managers. Our dedicated alternatives group of over 180 professionals across 20 global locations, work on $200bn of alternatives advisory mandates for clients - $21bn of assets being under direct implementation.3
Our alternative solutions are broad and deep, enabling our clients to create a portfolio that suits their risk tolerance and investment objectives. Drawing on our extensive global resources, our specialist team offers our clients a bespoke service, supported by extensive risk management and rigorous operational due diligence. We believe this helps assure clients to invest with the confidence that their portfolios are in experienced hands.
We work with you to determine the level of service you require along with your detailed investment strategy and tailor a solution that fits your needs.
Make informed investment decisions with our cloud-based research platform, MercerInsight®. Sophisticated and intuitive, MercerInsight gives institutional investors easy access to a wide range of investment data — all from your desktop.
Gain global reach and leverage local resources. Our Alternatives group offers the personal service of a specialized boutique, combined with the resources of a global consultancy.
Our risk management solution focuses on evaluating non-portfolio risks, primarily those associated with investment operating models, operations and execution. Importantly, we have implemented a reporting structure that keeps you informed about your investments every step along the way.
Our operational due diligence specialists work closely with our manager research team and conduct independent evaluations to provide an added layer of governance. Dedicated resources keep you informed about industry best practices, including an independent review within investment manager due diligence processes.
Access information and policies regarding the Sustainable Finance Disclosure Regulation (SFDR) for our Luxembourg based Private Markets funds
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1 Diversification does not ensure against market loss
2 References to Mercer shall be construed to include Mercer LLC and/or its associated companies.
3 As at 31 December 2019
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There are substantial risks associated with investments classified as alternatives investments. Investors should have the ability, investing sophistication and experience to bear the risks associated with such investments.
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